BP shares drop after profit misses estimates on weak gas trading

BP Plc’s third-quarter profits rebounded from prior periods, but fell short as weak results in the gas marketing sector offset a good performance in oil trading.

As of 8:03 am in London, shares of the company dropped 4.1% to 505.2p.

BP, like its Big Oil counterparts, saw earnings that were below the record levels of last year but still high by historical standards. This is because geopolitical tensions are keeping energy prices at a high level. These huge cash flows have sparked a wave of deals, with Exxon Mobil Corp. as well as Chevron Corp. each announcing two acquisitions worth more than $100 billion in the last month. This has helped them to gain a significant lead over Europe’s big oil companies. Profits rebounded in the second quarter but remain below levels of 2022

BP reported that its third-quarter net profit was $3.29billion, up from $2.59billion in the previous period. This is a decrease from $8.15billion a year ago, but a significant increase from the $2.59billion in the preceding quarter. This figure was far below the average analyst forecast of $4.05billion. The $1.5 billion quarterly buyback of shares was not changed.

Stuart Joyner, an analyst at Redburn Atlantic, said that these are “a set of disappointing numbers”. Given the macroeconomic backdrop, he had hoped for a slight increase to $1.75billion in the buyback.

According to the statement, BP’s oil unit experienced a “very solid” quarter. Gas trading and marketing, on the other hand, was “weak”, after an “exceptional start” to the year. Refining availability increased by 2 percentage point from a year ago to 96.3%. However, margins declined and the company expects further weakness in the fourth quarter.

Despite the missed profit, BP’s debt pile has resumed its downward trend. Net debt dropped by $1.3 billion, to $22.3 billion.

Last week, BP’s European counterparts TotalEnergies Se Equinor ASA Eni Spa beat expectations. Exxon and Chevron missed their estimates.

Murray Auchincloss became the interim CEO of BP following Bernard Looney’s surprise resignation.